City Developments (CIT SP; S$5.09 – SELL): Recent low of S$4.82 may be retested soon. Break below that level could see S$4.70/S$4.46 being tested next.
• The stock broke below its S$5.13 support recently and is still below it. Unless the stock can close back above it, more selling could take place soon. Maintain sell on strength with resistance seen at S$5.15 and S$5.55.
• Indicators are improving but have yet to confirm the turnaround. RSI is still below its neutral mark and MACD is still negative.
• The recent low at S$4.82 could be tested again soon. A break below that level could see the stock fall to S$4.70 and 4.46 next.
Hongkong Land Holdings (HKL SP; US$2.00 – SELL): Selling momentum may pick up as MACD and RSI have turned negative. Close below US$1.88 could see next support at US$1.75/US41.50 being tested.
• Appears to be sitting just above forming its consolidation triangle support at US$2.00. A downside break to close below US$1.88 would likely induce further selling on the stock. The next support is at US$1.78 and US$1.50.
• Both MACD and RSI have turned negative, suggesting that the selling momentum could be picking up.
• Resistance is seen at US$2.20 and US$2.55.
Fundamentally…
Action Asia (ACTA SP; S$0.055 – Not rated): FY08 results are due by end this week. Given its last announced net cash balance of S$40.9m and that the Company has not paid any dividends for the three quarters of FY08, a DPS of 0.2-0.5cts seems a reasonable assumption. This translates into dividend yields of 3.6%-9.1%. Note that its net cash position is 1.9x its market cap of S$22.0m. Not rated.
• The stock has fallen below its long term sideways trend channel. Unless, the stock can regain the S$0.06 resistance soon, the stock could see more downside. Support is at S$0.04.
• Technical indicators continue to show mixed results, suggesting that more sideways movement is likely.
• Until there is a pick up in volume, the stock would likely continue to drift sideways. Investors would likely do well to sell out and look for opportunities elsewhere.
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